Are you prepared to take over your parents’ budget, if the time comes?
Your parents are now seniors and after years of taking care of you, they now need your help. Where do you begin? That’s the question asked in the Daily Times’ article “Senior Life: What a nightmare! Untangling a loved one’s finances”?
After the health crisis is over, it’s time to get busy. Open the door to the home and start looking. Where’s the will, where are the bank statements and where’s the information about Social Security benefits? When you start making calls or going online, you run into a bigger problem than figuring out where the papers are kept, no one will talk with you. You are not legally authorized, even though you are a direct descendant.
This happens all the time.
Statistically speaking, it is extremely likely that your parent will end up, at some point, in a nursing home or a rehabilitation center for an extended period of time. Most people have no idea what their parent’s financial situation is, where and how they keep their financial and legal records and what they would need to do in an emergency.
It’s not that difficult to fix, but you and your hopefully healthy parent or parents need to start by planning for the future. That means sitting down with an estate planning attorney and making sure to have some key documents, most importantly, a Power of Attorney.
A Power of Attorney (POA) is a legal document that gives you permission to act on another person’s behalf as their agent if they are unable to do so. It must be properly prepared for your state’s laws. It allows you to pay bills and make decisions on behalf of a loved one, while they are alive. Without it, you’ll need to go to court to be appointed as legal guardian.
If you have downloaded a Power of Attorney and are hoping it works, be warned: chances are good it won’t. Many financial institutions insist that the only POA they will accept, are the ones that they issue.
Once you have a POA in place, assuming that your parent is able to sign it, then it’s time to get organized. You’ll need to go through all the important papers, setting up a system so you can see what bills need to be paid, how many bank accounts or investment accounts exist and review her financial status.
Next, it’s time to consolidate. If your parent was a child of the Depression, chances are they have money in many different places. This gave them a sense of security and gives you a headache. Consolidate four different checking accounts into one. The same should be done for any CDs, investment accounts and credit cards. Have her Social Security and any pension checks deposited into one account.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, as well as point you in the right direction, if the senior financial situation develops in your life.
Reference: Daily Times (April 9, 2019) “Senior Life: What a nightmare! Untangling a loved one’s finances”